Entrepreneurial Small Business 4th Edition by Jerome Katz ,Richard Green

Exercise 15

Evaluating a Business Plan The goal of this exercise is to help you get used to scoring business plans the way bankers and investors do in the real world. Most financial professionals have checklists and scoring sheets that convert their accumulated wisdom into the factors that make a difference. Knowing how this scoring works can help entrepreneurs to bulletproof their plan, identifying problems before outsiders see them.
One of the best business plan scoring systems is available to everyone for free on the Web. It comes from France's Ibis Associates. Originally built from a test of 57 firms, today it has been refined and is used on thousands of businesses, mostly from the United States and Western Europe.
a. Go to Ibis Associates New Business Plan analysis page at http://www.ibisassoc.co.uk/business-startup- analysis.htm.
b. Print out the checklist and familiarize yourself with it.
c. Now read through the MyLibros.com business plan included in Appendix B of this chapter. When you see something that relates to the scoring checklist, mark it.
d. After reading the plan, fill in 'no' for those items missing.
e. Go to the Web site and fill in the questionnaire for the MyLibros.com , and check the score received.
f. Be ready to discuss your findings (and defend your scoring) in class. Give some thought to what could be done better in the plan to achieve a higher score.
Your score will vary from those of others in the class. You will find that some of the difference comes from how closely people read the plan and the checklist. But there will be times when everyone will agree on what was read, but disagree on the meaning or score. That happens in business too. That is why it is important to try your plan out repeatedly. Just because one person or firm or bank said no does not mean that every one will see it or score it the same way. (Scoring site used with permission of [e-mail] for Ibis Associates, January 25, 2004.)